Japan’s dilemma over whether to revive nuclear energy has been reignited ahead of next weekend’s election with a finding that a prominent reactor can’t be restarted because it sits on an active volcanic fault line.

The decision prompted a slump in the shares of several electricity companies on Tuesday despite earlier expectations the next government would push ahead with some greater reliance on nuclear energy regardless of public opposition.

In the latest fallout from last year’s tsunami and nuclear crisis, an expert team from the reinvigorated Nuclear Regulatory Authority said it could not guarantee the safety of one of the country’s oldest reactors at Tsuruga, on the west coast of the country’s main island.

Only two of Japan’s 50 nuclear power reactors are operating. They have progressively closed down for routine maintenance since the tsunami but been stopped from restarting due to public opposition.

In opinion polls, up to three-quarters of the population have expressed dissatisfaction with nuclear energy since the disaster forcing the government to flag plans for switching to renewable energy and greater efficiency measures.

But most experts are sceptical renewable energy can replace a substantial share of the 50 per cent long term reliance on nuclear energy that was being projected before the disaster, and as a result Japan has been forced to turn to higher priced spot market imports of gas and oil to fill its electricity short fall.

The three major parties have been stepping carefully around the issue due to the public opposition but are, to varying degrees, seen as now understanding that nuclear reactors will have to be restarted to avoid the impact of high priced electricity.

“They will keep saying we need to get rid of the reactors but not for the foreseeable future," Chuo University policy studies professor Steven Reed said on Tuesday.

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But Sophia University political scientist Koichi Nakano said the main parties had so muddied the waters over where they stood on nuclear issues that people might be too confused to vote on what had earlier appeared in opinion polls as a key issue. He said the next likely prime minister,
Shinzo Abe
, from the opposition conservative Liberal Democratic Party, would immediately come under pressure from the business community to restart reactors and clarify the long-term energy supply mix.

“This will be a very unpopular decision," said Professor Nakano, who doubts whether Mr Abe will survive longer than the roughly one-year term in office that has ­prevailed for the last six prime ­ministers.

Japan Atomic energy, which operates two Tsuruga reactors had been planning to gradually decommission them and replace them with two new plants but now faces the prospect of decommissioning costs with no future revenue stream.

Shares in the power companies which own it fell between three and nine per cent in the latest blow to the once financially strong sector.